Keith Brown Origin SA FCAS Stage 1 dispute

Stage 1 dispute 2 Origin has commenced a ‘stage 1’ dispute with AEMO relating to AEMO’s basis of allocating FCAS costs in SA for the period 11 October to 10 November 2015 Origin has been adversely financially impacted by AEMO’s current allocation methodology which allocates FCAS on the basis of participant’s global causer pays factor despite the fact that the SA FCAS requirements in the period in question were local It is Origin’s contention that the current allocation of FCAS costs is not equitable and the contribution factor for a Market Participant should reflect the extent to which the Market Participant contributed to the need for regulation services

Origin disputes AEMO’s current FCAS apportionment 3 SA local FCAS cost recovery was apportioned by AEMO to SA generators based on causer pays factors AEMO applied a global causer pays factor for each SA participant to determine FCAS cost apportionment This resulted in Market Participants with generation solely in SA to be allocated local FCAS costs based on the causer pays factor relating to SA generation but Market Participants with generation outside SA being allocated FCAS costs relating to all their generation in the NEM In Origins case Origin’s NSW, Vic and Queensland generator causer pays factors were included This unfairly impacts on SA generators with generation in other regions for what was a local SA FCAS requirement the contribution factor does not reflect the extent to which the Market Participant contributed to the need for regulation services

Dispute resolution proposal 4 AEMO proposes to resolve the dispute by allocating causer pays factors on basis of a participants SA generation only, using a reasonable approximation of regional causer pays factors. Origin believes this is a equitable way to resolve the dispute because it fairly allocates SA FCAS costs to SA participants. If the dispute is not resolved Origin intends to go to Stage 2.